Global Crossing, Microsoft sign Asian fibre net JV deal

MS takes 3.5 per cent of $4bn operation

Plans for the first Asian broadband seamless network have come nearer to fruition with the signing of a deal announced in September between Global Crossing, Microsoft ($175 million for a 3.5 per cent stake) and Softbank (also $175 million for 3.5 per cent), to create a joint-venture company called Asia Global Crossing. Its East Asia Crossing network will consist of a high-capacity fibre optic link between China, Taiwan, Hong Kong, Singapore, Malaysia, Korea and the Philippines, and is scheduled for completion in June 2001. It is intended that the JV will expand to include Thailand, India, Indonesia, Australia and New Zealand. A couple of weeks ago, Hutchison Whompoa and Global Crossing agreed a 50:50 joint venture to tackle telecoms and Internet opportunities in Hong Kong. When the present plans are completed, Global Crossing will be able to offer network access to some 80 per cent of the world's telecoms traffic, but whether Asian users will be able to afford the tariffs remains to be seen. It has six undersea systems: Atlantic Crossing (AC-1, which started operation in May 1998), Pacific Crossing (PC-1), Mid-Atlantic Crossing (MAC), PanAmerican Crossing (PAC), South American Crossing (SAC) and AC-2. In addition, it has the PanEuropean Crossing (PEC) and Global Access Limited (GAL) in Japan. For its part, Global Crossing, with $4 billion of funding, has through its Global Marine Systems subsidiary the biggest fleet of cable-laying and maintenance vessels in the world. Last week, the acquisition of Racal Telecom was completed following the October agreement by Global Crossing to buy it for £1 billion in cash. Racal's network has a traffic flow consisting of 65 per cent data. The network, with its London metropolitan ring, is expected to be within 5km of two-thirds of UK businesses by 2001. A key feature is that Racal has more BT connection points than any other UK network, which reduces the interconnection costs. The Racal and Global Crossing networks are currently being linked together in the London docklands. ®